When you subscribe we will use the information you provide to send you these newsletters. Sometimes they’ll include recommendations for other related newsletters or services we offer. OurPrivacy Noticeexplains more about how we use your data, and your rights. You can unsubscribe at any time.

Rightly or wrongly, Starbucks now arguably has a bigger reputation as a tax dodger than coffee connoisseur.

Other high profile multinationals ‘named and shamed’ by media for tax avoidance practices include Amazon and Google.

Scottish SMEs should also be aware of the implications of defaulting on tax. They are by no means exempt.

Tax shaming is really as bad as it sounds and can have a profound impact on an organisation’s reputation, bottom line and value.

We’ve seen a global crackdown on global tax avoidance in recent years and it continues to be a hot topic.

This shift in attitude follows new initiatives by international trade bodies in an effort to improve transparency and reduce opportunities to attempt tax avoidance.

New tax avoidance initiatives also have implications for Scottish SMEs trading internationally as well as the Scottish economy with exports playing a significant role in continued growth.

SMEs are as much at risk as large multinationals and are often included on the UK tax authorities’ list of deliberate tax defaulters.

The authorities are most interested in companies that transact across borders with great frequency, regardless of size, and so these companies need to future-proof tax practices to stand up to the scrutiny that bigger organisations are currently facing.

Businesses need to establish whether new national tax laws apply to them and what they need to do to comply.

For example, The Organisation for Economic Co-operation and Development’s (OECD) ‘Base Erosion and Profit Shifting’ (BEPS) project will provide more clarity and the tools to ensure profits are taxed where they are generated.

The European Commission’s recent proposal would see EU member states share information about agreements with individual businesses trading internationally on how their activities will be taxed.

The United Nations, the International Monetary Fund, the World Bank and the G20 also have independent but complementary tax transparency initiatives being developed.

Despite changing attitudes and development of new regulations, questions remain about when and exactly how these new protocols will come into effect.

With this in mind, many national governments have taken their own steps to bring in tougher and more practical tax avoidance rules.

The latest example is the UK’s diverted profits tax, which is targeted at large international businesses and applicable to all profits arising on or after 1 April 2015.

Although operating in a country with a strong reputation as a tax haven does not automatically imply a company is demonstrating tax evasion practices, interaction with these jurisdictions is often considered to be an indicator of this.

Changing attitudes towards tax avoidance is seeing growing pressure on such states with low taxes or a lax in robust tax regulations.

Pressure on Ireland for example has seen it close the loophole that allowed multinationals like Google and Apple to benefit from their low tax rates.

More recently, we have also seen demands for stronger action against global tax evasion in ‘tax havens’ in political parties’ election campaign manifestos.

Regardless of size and whether they trade internationally, businesses should take precautionary steps to ensure it is complying with new tax avoidance regulations.

This should be driven by the CEO.

Completing a thorough audit of tax practices, and considering tax risks and how these are managed, will highlight any potential areas of doubt.

By conducting these reviews regularly and planning tax accordingly, businesses can avoid the repercussions.

Having an accurate tax policy assures the authorities that a business is operating transparently, and complying with these regulations.

It’s is particularly important for those businesses looking to grow internationally, like many Scottish firms, to consider any weaknesses in their current tax policies and how these can be strengthened, as well as the steps they would need to take as they move into new markets.

If you’re uncomfortable with the thought of the authorities, or even customers and journalists, questioning your tax practices, it’s worth taking the necessary steps to ensure these are transparent and comply with the necessary protocols.

With tax planning now under the spotlight, never has this been more important to a business.